Schumer-Led American Rescue Plan Gave New York 2nd Largest Investment From SSBCI In The Country At Over $500M, Federal Investment That Will Expand Investment And Opportunities for Entrepreneurs, Small Businesses, and Underserved Businesses Across The State
On The Heels of Schumer’s CHIPS & Science Bill To Bring Semiconductor Production Back From Overseas, And Inflation Reduction Act To Strengthen America’s Clean Energy Manufacturing, Schumer Is Delivering BIG Fed Investment To Restore Upstate NY As An Innovation And Manufacturing Powerhouse, Driving Major New Opportunities for Entrepreneurship and Small Businesses
Schumer: New York Small Businesses Will Get A $500M Boost To Recover And Lead The Way In New Industries And Rebuilding The Economy
After delivering on historic investment in the State Small Business Credit Initiative (SSBCI) as part of the American Rescue Plan, U.S. Senate Majority Leader Charles E. Schumer announced today that the U.S. Treasury Department has approved New York’s application for SSBCI funding for up to $501 million. This federal investment will be used to increase access to capital and new contracting opportunities, as well as promote entrepreneurship, particularly in rural and underserved areas, helping small businesses recover from the pandemic and deal with increased costs and supply chain challenges.
“This historic $500 million federal investment is the shot in the arm New York’s small businesses need to recover from the pandemic and rebuild our local economies. This federal assistance will help support underserved businesses, invest in entrepreneurs and small businesses in key industries like manufacturing and clean energy to address the nation’s supply chain challenges, and create good-paying jobs in the communities that need them most,” said Senator Schumer. “As majority leader, I fought to secure the State Small Business Credit Initiative federal investment as part of the American Rescue Plan to meet the unprecedented challenges faced by the nation’s small businesses during the pandemic and I am proud to now deliver this federal funding for New York to build up the state’s small businesses and manufacturing base to accelerate our recovery, and drive our economy into the future.”
“This is an historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities,” said Secretary of the Treasury Janet L. Yellen. “I’m excited to see how SSBCI funds will promote equitable economic growth in New York and across the country.”
Schumer, who helped to include $10 billion for SSBCI in the American Rescue Plan, said this federal funding is expected to leverage up to $10 of private investment for every $1 of SSBCI capital funding, significantly increasing access to capital for entrepreneurs and small businesses, including underserved businesses like minority- and women-owned and rural businesses. New York State will be able to use this funding to create venture capital programs, loan participation programs, loan guarantee programs, collateral support programs, capital access programs and programs to help small and underserved businesses compete for government contracts, including projects funded by the bipartisan Infrastructure Investment and Jobs Act.
Schumer said that investments like the SSBCI federal funding is also key to strengthening New York’s small manufacturers and can help entrepreneurs and innovators grow new manufacturing jobs in New York to fill immediate and future supply chain gaps, helping make more in New York, and helping alleviate the national supply chain crisis. Earlier this year, Schumer wrote to Secretary Yellen to push for the Administration to work with states on utilizing SSBCI funding to support manufacturing and innovation. Schumer’s CHIPS & Science Act and Inflation Reduction Act are also driving major new growth in American manufacturing, and this SSBCI funding for New York will help more of the state’s entrepreneurs and small businesses invest and succeed as part of that new opportunity in manufacturing and clean energy.
New York has already been putting the funding Schumer has delivered for this program previously to work helping to boost minority owned and underserved businesses across the state. For example, New York has allocated over $154 million to the Emerging & Regional Manager Multi-Fund Program, which provides equity support to small businesses by investing through private venture capital funds. Empire State Development will provide SSBCI capital support to venture capital funds with diverse and emerging fund managers. In addition, New York has allocated funds to two programs designed to help small and underserved businesses compete for government contracts, including through an existing program that saw 75% of its support for potential contractors going to minority- and women-owned businesses.
Senator Schumer has been leading the charge for robust federal relief for small businesses. Since the start of the pandemic, the senator has secured:
- Over $62 billion in federal relief combined from forgivable loans through the Small Business Administration’s Paycheck Protection Program and grants and low-interest loans through Economic Injury Disaster Loan program, supporting hundreds of thousands of New York’s small businesses and nonprofits.
- Over $3.6 billion in relief to more than 9,700 New York restaurants through the SBA’s Restaurant Revitalization Fund.
- Over $2 billion to more than 1,400 theaters, independent music venues and comedy clubs, independent movie theaters, and cultural institutions like museums and zoos across New York through the Shuttered Venue Operators Grant, otherwise known as the ‘Save Our Stages’ program.
New York will also fund a loan program to make low-cost capital available to more small businesses and nonprofit organizations by partnering with Community Development Financial Institution (CDFI) lenders. Throughout the pandemic, Schumer has fought for expanding support for the CDFI network to expand access to capital and technical assistance for underserved businesses and nonprofits.
A copy of Schumer’s original joint letter to U.S. Department of Treasury Secretary Janet Yellen appears below:
Dear Secretary Yellen:
We write to request that the Department of the Treasury work with states to use funds from the American Rescue Plan Act-funded State Small Business Credit Initiative (SSBCI) to address the urgent need to bring manufacturing back to the United States to strengthen domestic supply chains, prevent delays and disruptions, and lower prices for American families. The manufacturing sector accounted for the largest share of total loans and investments under the previous round of SSBCI funding, and we hope to see robust investments in domestic manufacturing using the funding provided through the American Rescue Plan.
Treasury has taken an important step in the right direction by including in the initial SSBCI guidance direction to states to consider the benefits of investments in small and mid-size enterprise manufacturing and supply chain resiliency as they design other capital support programs. We appreciate that the Administration recently expressed an interest in convening a roundtable of key stakeholders, and we ask that Treasury consider hosting regional workshops to share best practices for helping states adopt investment strategies targeting supply chain weaknesses, particularly investment in minority-owned and rural small businesses.
We have already worked together on reviving American manufacturing, and our collective efforts have delivered real results: 367,000 new American manufacturing jobs were created last year, the most in nearly 30 years, fueled by an expansion of manufacturing activity every month that has recovered domestic manufacturing growth to pre-pandemic levels. Challenges remain, however, especially for smaller and disadvantaged manufacturers. Manufacturers have larger capital requirements than many other sectors and need access to ready capital.
Small and medium-sized manufacturers, which account for 98 percent of domestic manufacturers, face particular difficulties accessing capital to invest in equipment and facility upgrades, affecting their productivity. A National Science Foundation-funded study found that only 0.4 percent of private venture capital dollars invested in the U.S. went to manufacturing, starving the sector of the investment needed for scaling production here in America. Minority-owned, rural, and other socially and economically disadvantaged manufacturers face additional hurdles in accessing the capital they need to succeed.
The SSBCI is an important tool for strengthening America’s small manufacturers, including providing the capital to expand the domestic production of critical goods that can fill immediate and future supply chain gaps in technologies like semiconductors, batteries, and other innovation industries. Along with encouraging venture capital investments, the SSBCI can also provide collateral support programs, loan guarantee, and loan participation programs which can support smaller manufacturers.
In addition to regional roundtables to help states make use of the SSBCI to support manufacturing, we request that Treasury help coordinate other federal resources to support state efforts like the Commerce Department’s Manufacturing Extension Partnership, Manufacturing USA institutes, and Minority Business Development Agency centers. State agencies implementing the SSBCI can turn to intermediaries, working with federal partners to help educate lenders and venture capital investors about the unique needs of manufacturers, to support capital flowing to manufacturing and supply chain needs. For example, states should plan interventions that deploy SSBCI towards ownership transitions among the estimated 125,000 small manufacturers that are at risk of closure when their owners are expected to retire, helping to prevent the loss of these companies. Treasury should also consider support for jurisdictions adding innovative financing tools to deploy SSBCI program dollars effectively in supporting the unique cash flow attributes of manufacturers and supply chain industries.
The SSBCI application for technical assistance (TA), due in late June 2022, also creates a window of opportunity to target support to small manufacturers. Congress gave Treasury the flexibility to deploy these funds, including the authority to partner with the Commerce Department, on issues like manufacturing and diverse ownership. We believe Treasury should incorporate advice for manufacturers specifically in the forthcoming TA guidelines. TA funds will also be an important opportunity to strengthen the role of Community Development Financial Institutions (CDFIs) in manufacturing, as they will likely be one of the key entities deploying SSBCI-backed debt products. CDFIs also provide, or have strong partnerships with organizations that provide, technical assistance to support growing manufacturing businesses, particularly those in rural areas or those owned by Americans in traditionally-marginalized communities.
We believe that funding from the SSBCI will support more resilient domestic supply chains and lead to a stronger manufacturing sector that will strengthen our economy and communities for generations. We thank you for considering our perspective and we look forward to your response.